Chartered to Start Making Processors for AMD in Mid-2006.

Chartered Semiconductor, a contract maker of chips from Singapore who signed a contract to manufacture AMD64 processors for Advanced Micro Devices, recently confirmed its intentions and said that the manufacturing would kick off in the Q2 2006. This may be a major enhancement to availability of processors by AMD.

“We announced the plan last year, but it is on schedule for the second quarter,” said Maggie Tan, a spokeswoman for Chartered, during a phone interview with IDG News Services.

In November, 2004, AMD and Chartered Semiconductor Manufacturing announced they have entered into sourcing and manufacturing technology agreements whereby Chartered will implement under license portions of AMD’s Automated Precision Manufacturing (APM) software suite and become an additional manufacturing source of AMD64 microprocessors.

Chartered planned to use its Fab 7 located in Singapore that produces 300mm silicon wafers and uses 90nm process technology similar to that developed by AMD and IBM. Analyst Nathan Brookwood expected the foundry to be qualified by late 2005, which means that two quarter lag seems to be a slight delay from the original schedule.

In case AMD really initiates outsourcing of its chips to Chartered in the second quarter, availability of its AMD64 processors, such as AMD Athlon 64, AMD Opteron, AMD Sempron and others, should be pretty high in the second half of 2006, as in the first quarter AMD’s new Fab 36 is expected to begin product. The Fab 36 will use 90nm process technology initially, a less advanced process technology compared to 65nm fabrication process originally discussed.

AMD plans to add production output on a steady year-to-year basis, giving it the potential to ship as many as 100 million units in 2008, while also keeping fab utilization at consistently high levels, the company said in a statement dedicated to the grand-opening of the Fab 36. The manufacturer’s chief executive Hector Ruiz told a web-site, just days before the opening, that the plan was to make 100 million processors in 2008-2009 timeframe only using AMD’s manufacturing capacities in Germany, which does not give any clear indication whether AMD actually demands any third-party’s manufacturing capacities. The company frequently changes market share targets it sets for itself: from 25% to 33%.

In the third quarter of 2005 the Sunnyvale, California-based chipmaker managed to capture 17.8% of the market, up 1.6% from 16.2% in the prior quarter. The Santa Clara, California-based Intel Corp., by contrast, lost 1.4% of its market share and now commands 80.8% of the market, figures from Mercury Research show.